An Evaluation of the Appropriateness of Methods of Valuing Residential Properties in Sub-Urban Areas of Ondo State, Nigeria

Alimi Rasheed Kolawole, Ayedun Caleb Abiodun, Bello Nurudeen Akinsola & Agava Yussuf Halim

Abstract


The study examined the approaches often adopted for the valuation of rural residential properties of Nigeria using Ugbe and Arigidi Akoko areas of Ondo State, Nigeria as the case study. The study was set out to determine which of the method(s) of valuation is the most appropriate for valuing residential properties in rural areas in the developing economy such as Nigeria. To achieve the aim of the study, the physical inspections of two residential properties were carried out, one in Arigidi Akoko and Ugbe Akoko in Ondo State. The data collected via the inspections were used in calculating the values using different methods. The study reveals that of all the methods of valuation, investment method is the most appropriate because the value derived is a function of the rent. Comparative method is inappropriate because property rarely changes hand in the rural areas while the cost method jack up property values to a level that the market cannot support. The figure of year’s purchase which is a multiplier is difficult to calculate because the yield which determines the years purchase is a function of analysis of sales transaction which is rare. There is little difference in construction cost in rural and urban areas whereas values between the two show wide disparity. The study recommends even distribution of projects by governments, organisations, religious bodies etc. Development projects act as catalyst which speeds up the rate of development which brings about influx of people thereby resulting in upward movement of rent and property values.


Full Text:

PDF

Refbacks

  • There are currently no refbacks.